Linking the Korean Emission Trading Scheme with the EU Emission Trading Scheme: What to Consider and How

Abstract

The world has put various efforts to reduce greenhouse gas emissions to respond to the threat of climate change. Recently, the EU announced to introduce the 'Carbon Border Adjustment Mechanism (CBAM)' which imposes a sort of tariff to the import products from the countries which do not impose the proper level of carbon reduction cost. Korea, as a major exporter to the EC, should respond to the CBAM to reduce the damage. Linking the Korean Emission Trading Scheme with the EU counterpart would be one way. For such a linkage, it is necessary to consider not only technical, administrative, and economic conditions, but also political and popular factors. This study seek several considerations and a proper method for the linkage.